In an attempt to capture the main features of an actual economy econometricians will build models including many equations with variables being related to lag terms linearly and nonlinearly. These models can, hopefully, be useful for generating useful forecasts and policy implications. Virtually every country in the world has at least one such model.
However, with the importance of trends continuously growing, the economies of countries are becoming more interlinked and so it is important to consider a global model which will be ambitious and large in form. In the lecture I discuss in general terms several such models.
However, it is important to then consider the question: how does one evaluate such large models? This turns out to be a difficult and complex problem.